This publication contains state and territory estimates of gross domestic product (referred to as gross state product (GSP)) and its components, in current price and volume terms, for the years 1998-99 to 2006-07.

REVISIONS IN THIS ISSUE

The estimates in this issue incorporate new and revised estimates from the annual supply and use tables for 2003-04 to 2005-06 and updated data from other sources which normally become available by this time each year. All states are affected by these revisions, although the extent to which each state is affected varies.

CHANGES IN THIS ISSUE

Significant changes have been made in this publication. In particular, estimates of GSP compiled using the Production approach (GSP(P)) have been introduced for the first time. Consequently, the headline measure of GSP has changed to GSP(A), in both current price and volume terms. GSP(A) is derived as the simple average of available GSP measures. A statistical discrepancy (relative to GSP(A)) is included for both volume and current price estimates compiled using other approaches. Lastly, the volume estimates are now considered sufficiently robust to remove their experimental status.

General Government Gross Operating Surplus (GOS) will no longer be separately identified in the Total factor income tables (Tables 33 to 41) but will be allocated to the relevant industries.

The individual state Household Income Account tables will no longer be included in these publication tables, but are available electronically.

More detail on changes to the electronic spreadsheets is available in the information paper Changes to Publication and Spreadsheet Tables for the Annual State Accounts, 2007 (cat. no. 5220.0.55.003).

DATA VALUES AND ROUNDING

All values, unless otherwise indicated, are shown in Australian dollars rounded to the nearest million.

Where figures have been rounded, discrepancies may occur between the sums of the component items and totals.

NEXT ISSUE

The 2007-08 issue of this publication is expected to be released in November 2008.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Donna Grcman on Canberra (02) 6252 5892.

SUMMARY COMMENTARY

GROWTH IN GSP VOLUME MEASURES

The volume measure of gross state product (GSP) increased in all states in 2006-07. Western Australia experienced the strongest growth (up 6.3%) followed by the Northern Territory (up 5.6%), the Australian Capital Territory (up 5.0%) and Queensland (up 4.9%). Growth in New South Wales, South Australia, Tasmania and Victoria was below Australian GDP growth of 3.2%.

GSP, Chain volume measures - 2006-07

Annual growth

Average annual compound
growth rates (1996-97 to 2006-07)

%

%

New South Wales

1.8

2.9

Victoria

2.7

3.4

Queensland

4.9

4.8

South Australia

0.8

2.7

Western Australia

6.3

4.4

Tasmania

2.1

2.7

Northern Territory

5.6

4.3

Australian Capital Territory

5.0

3.6

Australia(a)

3.2

3.5

(a) Gross domestic product.

All states were positive contributors to Australia's GDP growth in 2006-07. The highest contributions to GDP growth were Queensland (0.9 percentage points), Western Australia (0.8 percentage points) and Victoria (0.7 percentage points).

GSP PER CAPITA

For some analytical purposes it is important to allow for the impact of population growth on movements in GSP. The annual growth in GSP per capita was lower than GSP growth for all states.

Four states showed growth rates in GSP per capita that were stronger than the Australian growth rate of 1.7%. Western Australia (up 4.1%) showed the strongest growth in GSP per capita, with both the Australian Capital Territory and the Northern Territory (up 3.7%) having the next highest growth. South Australia had a fall in GSP per capita of 0.3%.

GSP per capita, Chain volume measures - 2005-06 to 2006-07

REAL GROSS STATE INCOME

Volume estimates of GSP measure the volume of goods and services produced in each state. If the terms of trade for a state change significantly (i.e. the prices for a state's exports and imports change at different rates) then GSP will not accurately reflect the change in real purchasing power of the income generated within a state. For this reason, real gross state income (RGSI) includes an adjustment for the terms of trade. (For details on the calculation method see the Explanatory Notes, paragraphs 28 - 30).

The following graph shows annual percentage changes in RGSI per capita in 2006-07. All states, except Victoria and the Australian Capital Territory, experienced growth in RGSI per capita stronger than GSP per capita in 2006-07. This is consistent with the national trend of strong growth in the terms of trade over the past six years. In the past year, the continued improvement in the terms of trade has been led by strong rises in prices for mineral resources. Consequently, the impact of the terms of trade adjustment can be expected to have significantly affected those states with relatively large mining industries, Western Australia, Queensland and the Northern Territory.

RGSI per capita, Chain volume measures - 2005-06 to 2006-07

GROSS VALUE ADDED (GVA)

Volume growth in gross value added was positive in all states in 2006-07. The strongest growth was in Western Australia (up 6.8%), followed by the Northern Territory (up 5.3%), Queensland (up 4.9%) and the Australian Capital Territory (up 4.5%). Growth in Western Australia was driven by Construction (up 15.7%) and Mining (up 12.6%). The Northern Territory experienced strongest growth in Mining (up 12.1%), Queensland's growth was due to Construction (up 19.2%) and the Australian Capital Territory's strongest growth was in Communication (up 11.0%).

All other states experienced growth in gross value added below that of the national level growth of 3.3%.

Industry GVA Contribution to Gross State Product Growth - 2006-07

NSW

Vic

Qld

SA

WA

Tas

NT

ACT

Aust

%pts

%pts

%pts

%pts

%pts

%pts

%pts

%pts

%pts

Agriculture, forestry and fishing

-0.5

-0.5

-0.3

-2.1

-1.2

-0.3

0.1

0.0

-0.6

Mining

0.0

0.0

0.1

0.1

3.4

-0.1

2.8

0.0

0.5

Manufacturing

0.1

0.1

0.5

0.0

0.6

0.9

0.2

0.1

0.2

Electricity, gas and water supply

-0.1

-0.1

0.0

0.0

0.1

-0.1

-0.1

0.1

0.0

Construction

-0.1

0.4

1.4

0.6

1.1

0.3

-0.2

0.3

0.5

Wholesale trade

0.0

0.0

0.2

0.1

0.2

0.2

0.1

0.1

0.1

Retail trade

0.1

0.2

0.3

0.3

0.4

0.3

0.4

0.2

0.2

Accommodation, cafes and restaurants

0.1

0.0

0.1

0.0

0.0

0.0

0.0

0.1

0.0

Transport and storage

0.2

0.3

0.3

0.1

0.5

0.3

0.2

0.0

0.3

Communication services

0.2

0.2

0.2

0.1

0.1

0.1

0.2

0.2

0.2

Finance and insurance

0.4

0.3

0.5

0.5

0.3

0.4

0.2

0.3

0.4

Property and business services

0.6

0.5

0.4

0.4

0.4

0.2

0.3

0.7

0.5

Government administration and defence

0.1

0.1

0.2

0.1

0.3

0.0

0.5

1.7

0.2

Education

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.0

0.1

Health and community services

0.1

0.2

0.1

0.1

0.1

0.2

0.1

0.1

0.1

Cultural and recreational services

0.1

0.1

0.1

0.0

0.1

0.0

0.0

0.1

0.1

Personal and other services

0.0

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

Ownership of dwellings

0.3

0.3

0.4

0.3

0.2

0.2

0.5

0.4

0.3

Taxes less subsidies on products

0.2

0.2

0.3

0.1

0.3

0.0

0.1

0.2

0.2

Statistical discrepancy

-0.1

0.3

0.0

-0.2

-0.6

-0.8

0.2

0.4

-0.2

Gross State Product

1.8

2.7

4.9

0.8

6.3

2.1

5.6

5.0

3.2

At the Australia level, the main industries contributing to 2006-07 gross value added growth were Mining, Construction and Property and business services.

From a state perspective, there are differing industry impacts in gross value added growth. In 2006-07, the major contributors to growth in each state were:

New South Wales - Property and business services, Finance and insurance and Agriculture, forestry and fishing.

Victoria - Property and business services, Construction and Agriculture, forestry and fishing.

Volume growth in State final demand in 2006-07 was positive in all states except Tasmania (down -0.7%). The strongest growth was in Western Australia (up 8.8%), Queensland (up 7.4%) and the Australian Capital Territory (up 5.6%). Growth in Western Australia was driven by strong private gross fixed capital formation whereas Queensland's growth was driven by public gross fixed capital formation. The growth in the Australian Capital Territory was driven equally by private and public gross fixed capital formation.

All other states experienced growth in State final demand below that of national Domestic final demand growth of 4.1%.

State final demand, Chain volume measures(a) - 2006-07

2005-06

2006-07

SFD growth

Contribution to DFD

$m

$m

%

% pts

New South Wales

312 081

319 757

2.5

0.8

Victoria

239 818

245 575

2.4

0.6

Queensland

189 074

203 072

7.4

1.4

South Australia

67 443

69 059

2.4

0.2

Western Australia

106 797

116 190

8.8

1.0

Tasmania

20 239

20 095

-0.7

0.0

Northern Territory

14 076

14 285

1.5

0.0

Australian Capital Territory

31 832

33 624

5.6

0.2

Australia(b)

981 359

1 021 655

4.1

. .

. . not applicable

(a) Reference year for chain volume measures is 2005-06.

(b) Domestic final demand.

Most states were positive contributors to Australia's Domestic final demand growth in 2006-07. Queensland and Western Australia contributed 1.4 and 1.0 percentage points respectively. These two states accounted for 58% of the growth in total Domestic final demand.

GOVERNMENT FINAL CONSUMPTION EXPENDITURE

Government final consumption expenditure rose in all states in 2006-07. Queensland showed the strongest growth in volume terms of 6.0%, driven by strong state and local expenditure. The lowest growth was recorded in Victoria (up 2.6%), followed by South Australia (up 3.2%). The major contributors to Australia's growth in Government final consumption expenditure of 4.5% were New South Wales (1.6 percentage points) and Queensland (1.0 percentage points).

HOUSEHOLD FINAL CONSUMPTION EXPENDITURE

Household final consumption expenditure volume growth was strongest in Western Australia (up 5.5%), the Australian Capital Territory (up 5.2%) and Tasmania (up 4.2%). Weaker growth was experienced in South Australia (up 2.2%), Victoria (up 3.2%) and the Northern Territory (up 3.3%). The major contributors to Australia's growth in household final consumption expenditure of 3.6% were New South Wales (1.3 percentage points) and Victoria (0.8 percentage points).

PRIVATE GROSS FIXED CAPITAL FORMATION

In 2006-07, Western Australia had the strongest growth in Private gross fixed capital formation (up 16.2%) due mainly to strong Non-dwelling construction investment. Queensland (up 13.1%) and the Australian Capital Territory (up 10.7%) also experienced strong growth. The remaining states all had weaker growth than the Australian growth of 5.2%: Victoria (up 2.5%), South Australia (up 2.7%), New South Wales (down -3.0%), the Northern Territory (down -2.9%) and Tasmania (down -9.4%). The major contributors to Australia's growth were Queensland (2.8 percentage points) and Western Australia (2.6 percentage points).

PUBLIC GROSS FIXED CAPITAL FORMATION

The pattern of volume growth for Public gross fixed capital formation varied considerably across the states in 2006-07. While Queensland (up 24.3%), the Australian Capital Territory (up 9.7%) and Western Australia (up 4.5%) showed positive growth, growth in all other states was negative and below the Australian growth rate of 2.8%. The major contributor to Australia's growth in public gross fixed capital formation was Queensland (6.2 percentage points).

TOTAL FACTOR INCOME

Factor incomes grew in all states with Western Australia showing the strongest growth (17.3%), followed by Northern Territory (15.6%), Tasmania (13.1%) and Queensland (up 9.8%). The other states showed growth rates of between 5.5% and 8.2%, all below the Australian factor income growth of 8.4%.

There was strong overall growth in compensation of employees, which grew by 7.8% in Australia between 2005-06 and 2006-07. Queensland (up 11.6%), Western Australia (up 11.5%), the Northern Territory (up 11.3%) and the Australian Capital Territory (up 10.9%) showed the strongest growth while New South Wales (up 5.3%) and Tasmania (up 5.7%) showed weakest growth.

There was also strong overall growth in gross operating surplus (GOS) and gross mixed income (GMI), growing in Australia by 9.1%. All states experienced growth with GOS and GMI growth strongest in Tasmania (up 21.7%), Western Australia (up 21.3%) and the Northern Territory (up 18.4%). All other states were below the national growth rate, the weakest being in the Australian Capital Territory (up 2.8%) and Victoria (up 3.3%).

GROSS HOUSEHOLD DISPOSABLE INCOME PER CAPITA

The previous analysis of GSP per capita concentrates on the level of economic production and its growth. It does not provide a measure of incomes received by residents of a particular state, because a proportion of income generated in the production process may be transferred to other states ore overseas (and conversely income may be received from other states or overseas). A measure that takes these flows into account is gross household disposable income per capita.

Gross household disposable income per capita in 2006-07 was highest in the Australian Capital Territory and lowest in Tasmania. Please refer to Table 43 for more details. Differences between the states reflect differences in the impact of a range of factors including the average level of compensation of employees received per employee, the proportion of the population in employment, the age distribution of the population and differences in the level of dwelling rent (including that imputed to owner occupiers). For example a significant reason for the high level of gross household disposable income per capita in the Australian Capital Territory compared with other states is that the labour force participation rate is much higher there than in the rest of Australia.